Covine Ltd is a company that makes three products and the variable costs are as follows; A B C £ £ £ Direct materials 12 13 15 Direct labour (£12 per hour) 24 36 36 Variable overhead 1 2 2 37 51 53 The sale price of A is £42, B is £57 and C is £56. During the month of June the availability of Direct Labour is limited to 12,000 hours due to staff taking holidays. Sales demand is expected to be 3000 units of A, 3000 units of B and 2000 of C. Monthly fixed costs are £20,000 and opening stocks are zero. Question Calculate the maximum profit that can be made next month

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Covine Ltd is a company that makes three products and the variable costs are as follows;

                                                             A                    B                    C

                                                            £                      £                      £         

Direct materials                                12                   13                   15

Direct labour (£12 per hour)          24                   36                   36

Variable overhead                           1                      2                      2

                                                            37                   51                   53

 

The sale price of A is £42, B is £57 and C is £56. During the month of June the availability of Direct Labour is limited to 12,000 hours due to staff taking holidays. Sales demand is expected to be 3000 units of A, 3000 units of B and 2000 of C.

Monthly fixed costs are £20,000 and opening stocks are zero.

Question

  1. Calculate the maximum profit that can be made next month
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Cost Sheet
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education